InterDigital and Technicolor – How well do their Patent Portfolios combine?

Technicolor, the French media, and entertainment company is selling its patent licensing business to the US wireless technology provider InterDigital in a deal worth $475 million. As part of the deal, InterDigital will acquire most of Technicolor’s patent portfolio (more than 21,000 patents), excluding some mobile patents, a small number of patents for nascent technologies and some patents associated with patent pools.

The sale, which is expected to close in mid-2018, includes an upfront payment of $150 million. In addition, Technicolor will receive 42.5 percent of all future cash receipts from InterDigital’s new licensing activities in consumer electronics. InterDigital will also grant back a perpetual license to Technicolor for the patents acquired in the transaction. The above acquisition more than doubles the size of InterDigital’s present patent portfolio. The expectation is that the deal will greatly increase InterDigital’s technology coverage in mobile devices and display and video technologies.

The motivation for doing this analysis was first to understand the technology coverage of the patent portfolios of each of the above transacting companies. A second and more important objective was to study the portfolio fit between InterDigital and Technicolor. In effect, how well the two portfolios complemented each other – to deliver the expected growth from the increasingly related areas of mobile and video technologies.

We analyzed the individual patent portfolios of InterDigital and Technicolor, to understand the technology coverage of each. We further did a granular comparison of the two portfolios using a composite taxonomy, to determine how well they complemented each other – to deliver the expected growth from the increasingly related areas of mobile and video technologies. The findings of this report have been referenced in a post by the IAM Blog on March 8, 2018.